Is Refinancing Worth the Cost?
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Searching for mortgage advice? We can assist you! Give us a call today at (207) 571-8034. Want to get started? Apply Online Now.
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It has been said that only in the case your new interest will be at least two points lower, should you refinance your loan. That might have been accurate years ago, but with refinancing dropping in cost over the last few years, it's a good time to explore the options of a new mortgage! A refinance is often worth its cost many times over, considering the advantages that it brings, in addition to a reduced interest rate.
Benefits
You may be able to bring down your interest rate (sometimes by a lot) and make smaller monthly payments with your refinanced mortgage loan. You may also have the option to "cash out" a portion of the built-up equity in your residence, which you are able use to consolidate debt, improve your home, or take a vacation. With reduced rates, you might also be able to build up home equity more quickly by switching to a shorter term mortgage.
Expenses and Fees
As you probably expect, you will have to pay for the process of refinancing. You'll have to pay the same kinds of fees as with your present home loan. Among these may be settlement costs, appraisal fees, lender's title insurance, underwriting expenses, and so on.
Doing the Math
Paying points can result in a better interest rate. If you pay (on average) three percent of the mortgage loan amount at the start, the savings for the term of the refinanced mortgage loan can be substantial. Please talk to a tax professional before acting on advice that the paid points can be deducted on your taxes.
Speaking of taxes, when your interest rate is lowered, of course you'll also be lowering the interest amount that you'll be able to deduct on your federal income taxes. This is another cost that borrowers consider. Call us at (207) 571-8034 to help you do the math.
Most people find that the savings each month quickly balance out the up-front expenses of refinancing. We will help you determine what mortgage program is the ideal fit for you, taking into account your cash on hand, how likely you are to sell your home in the next few years, and how refinancing might effect your taxes. Call us at (207) 571-8034 to get started.
Want to know more about refinancing? Give us a call at (207) 571-8034.